Fresno dispensaries fall $3.9 million short of revenue goals

FRESNO, Calif. (KSEE/KGPE) – What was expected to be a cash cow for the City of Fresno may be developing into a cannabis conundrum, with dispensaries expected to come up $3.9 million short of revenue projections for 2025.

It’s a number that has contributed to what’s expected to be an over $20 million budget deficit for the city in 2026.

“I’ve never been one to want to be dependent on revenue from cannabis because we know how volatile that can be and it has clearly demonstrated that,” said Fresno Mayor Jerry Dyer.

Dyer said those words the day after the most recent mid-year budget forecast on Feb. 13, which showed the cannabis industry is projected to fall well short of its projected revenue for the year of $7.1 million, instead now forecasted at just over $3.1 million.

A piece of the puzzle not helping with that number is the fact only 13 of the 19 dispensaries supposed to be open are.

The mayor says while the revenue from cannabis can be unpredictable, it’s important to show support to those businesses working to open their doors for the first time, especially as the additional dollars would help pay for city services and could assist in balancing the budget moving forward.

“We will do everything we can to assist cannabis businesses to open up in our city,” he said.

At the mid-year budget review meeting, City Manager Georgeanne White revealed new dispensaries come up with their own numbers as far as projected sales, after which the city subtracts 25% from that projected revenue.

But still, many businesses are falling well short, with the average legal cannabis business seeing a -46% projected revenue.

“We’re seeing differences in projected revenue from -65%, -53%, -23%, -41%,” said White.

At the Artist Tree, the city’s first dispensary located at Palm Avenue and Nees Avenue, founder Lauren Fontein says sales and demand have been stable but admitted the average customer doesn’t spend what they used to.

“Prices have dropped a lot in the last couple years, so, the retail prices for products… an eight might have been $50 a few years ago and now, you know, it’s in the $30 range for the same exact product,” she said.

Fontein says while inflation, excise tax, other state business fees, and increased competition citywide also hurt revenue numbers, a major problem around the city and state for cannabis growers continues to be illicit marijuana sales, many of which she says comes from smoke shops.

“Those stores are eating away at the tax revenue that they could be receiving because they’re not paying the cannabis tax,” said Fontein. “Consumers can go there as an alternative and get products for cheaper and they may not even have to be 18 to get those products,” she said.

The city council has previously discussed measures to limit the number of smoke shops citywide, but to this date, nothing has come to a vote.